[StBernard] St. Bernard Council approves $3 million more for hospital after heated debate

[Westley Annis]

St. Bernard Council approves $3 million more for hospital after heated
debate

Print Benjamin Alexander-Bloch, NOLA.com | The Times-Picayune By Benjamin
Alexander-Bloch, NOLA.com | The Times-Picayune 
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on February 04, 2014 at 9:25 PM, updated February 04, 2014 at 9:26 PM

After contentious debate about the St. Bernard Parish Hospital's financial
footing and its management, the Parish Council on Tuesday evening voted to
allow the St. Bernard Hospital Service District to bond out another $3
million in revenue anticipation notes. 

Last year, after the hospital had opened in the fall of 2012, the council
allowed the hospital to bond out an initial $3 million that now is due in
March.

Council Chairman Guy McInnis grilled Wayne Landry, the hospital's interim
CEO, on Tuesday about the hospital's financial stability. Landry has said
the hospital was $100,000 ahead of the year before, on a cash basis. McInnis
questioned how that could be true when the hospital reported about $9.5
million in cash at the end of 2012 - about $4.5 not designated for capital
projects - and, more recently, it reported having only about $2.5 million in
cash.

Also, McInnis questioned why, with the $3 million due in March, the hospital
doesn't have at least that much in cash reserves to meet that obligation.

"I don't know what you are talking about. I have no numbers in front of me,"
Landry said. 

Landry did say, though, that some revenues already earned will not come to
the hospital until the next quarter. He said the $3 million is "a safety
net" to provide the hospital with money when needed because it does not yet
have any reserve funds.

Landry said that, if the one-time, 30-mill tax is approved by parish voters
in April, then within a few years, the hospital would develop such reserves.

Despite the heated exchange between Landry, McInnis and other councilmen,
McInnis and others indicated throughout that they would provide the hospital
with the $3 million - or an extension of the original $3 million, as many
councilmen have referred to it.

"Now, I am not against giving you $3 million. Obviously, you need it. You
have $2.5 million in the bank," McInnis said during the back-and-froth with
Landry.

Council resolution asks for hospital management explanation

Also on the agenda was a request by Councilman Ray Lauga that the Hospital
Service District "submit a list of operational negative impact items if the
hospital were managed by a large established regional healthcare provider."

The council ended up approving that resolution, despite about 10 St. Bernard
residents, mainly hospital employees, speaking against it. They said they
feared that they might lose their jobs if a third-party entity managed the
hospital. 

As part of the hospital's initial arrangement with Goldman Sachs, which
provided much of the hospital's financing, the hospital board signed an
agreement that the facility would be run by a third-party manager.

When the new public hospital first opened in the fall of 2012, the CEO was
provided by the nonprofit Franciscan Missionaries of Our Lady Health System.
But the Franciscan Missionaries pulled out of its agreement to manage the
$70 million facility in Chalmette soon after the hospital's opening.

The Franciscans cited differences in management philosophies, and some
former and current hospital staff described contentious working
relationships because of the managerial style of Landry, who at that time
was the hospital board's chairman.

After the Franciscans departure, the hospital, with Landry at its helm,
worked to get out of the third-party management clause in the Goldman Sachs
agreement. And in March, Landry told the council that Goldman Sachs, after
reviewing the hospital's operations, had agreed to do just that and allow
the hospital to be self-managed.